S-1/A: FB Bancorp Eyes Nasdaq Listing with $172.5 Million Stock Offering for Fidelity Bank Conversion

FB Bancorp is offering shares of common stock at $10.00 per share in connection with Fidelity Bank's conversion from a mutual savings bank to a stock savings bank, with plans to list on the Nasdaq Capital Market under the symbol FBLA.

Summary

• FB Bancorp, a newly formed Maryland corporation, is offering shares of its common stock at $10.00 per share to facilitate the conversion of Fidelity Bank from a mutual to a stock savings bank.
• The offering aims to raise between $127.5 million and $172.5 million, potentially increasing to $198.375 million due to demand or market conditions.
• Eligible depositors of Fidelity Bank, tax-qualified employee benefit plans, and community members will have priority in purchasing shares.
• FB Bancorp intends to use the net proceeds for capital contribution to Fidelity Bank, funding an employee stock ownership plan, and for general corporate purposes, including potential stock repurchases and dividend payments.
• Fidelity Bank plans to use its share of the proceeds to fund new loans, enhance products and services, and invest in securities.
• The stock is expected to be listed on the Nasdaq Capital Market under the symbol FBLA, though the offering is not contingent upon this listing.
• The subscription offering will expire on September 20, 2024, and may be extended to November 4, 2024, with regulatory approval.
• The minimum investment is 25 shares ($250), with individual purchase limits generally set at 70,000 shares ($700,000).
• The offering is contingent on selling at least 12,750,000 shares and receiving regulatory approvals from the LOFI, FDIC, and Federal Reserve Board.

Sentiment

Score: 6

Explanation: The document presents a mix of positive and negative aspects. The conversion and stock offering are aimed at growth and improved capital, but there are also risks related to market conditions, competition, and regulatory compliance. The recent net loss is a concern, but the overall plan seems reasonable.

Positives

• The conversion aims to increase capital to support future growth and profitability.
• The conversion will allow for the establishment of stock-based benefit plans to attract and retain qualified personnel.
• The offering provides an opportunity for customers and employees to purchase an equity interest in Fidelity Bank.
• Fidelity Bank intends to invest the net proceeds it receives from FB Bancorp to pay off the existing Federal Reserve Boards Bank Term Funding Program advance, fund new loans, enhance existing products and services, invest in securities, or for general corporate purposes.

Negatives

• The future price of the common stock may be less than the $10.00 purchase price.
• There may be a limited trading market in the common stock, which could hinder the ability to sell shares and may lower the market price.
• The implementation of stock-based benefit plans may dilute your ownership interest.
• The cost of additional finance and accounting systems, procedures, compliance and controls in order to satisfy our new public company reporting requirements will increase our expenses.

Risks

• Commercial real estate and commercial loans involve credit risks that could adversely affect the financial condition and results of operations.
• The geographic concentration of the loan portfolio and lending activities makes the company vulnerable to a downturn in the local economy.
• Future changes in interest rates could reduce profits and asset values.
• The company faces significant operational risks because of its reliance on technology, which may be subject to failure, interruption or security breaches.
• Strong competition within the market areas may limit growth and profitability.
• The company is an emerging growth company, and any decision to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make its common stock less attractive to investors.
• The future price of the shares of common stock may be less than the $10.00 purchase price per share in the stock offering.

Future Outlook

The document outlines Fidelity Bank's intention to continue pursuing its business strategies after the conversion and stock offering, subject to changes necessitated by future market conditions and other factors.

Management Comments

• Our principal objective is to build long-term value for our stockholders by operating a profitable community financial institution dedicated to meeting the banking needs of our customers and community.

Industry Context

The announcement reflects a trend of mutual savings banks converting to stock form to raise capital and enhance their competitive position in the financial services industry.

Comparison to Industry Standards

• The appraisal is based on a peer group of 11 publicly traded thrift holding companies with assets between $564 million and $2.8 billion as of March 31, 2024.
• Compared to the average pricing of the peer group, FB Bancorp's pro forma pricing ratios at the midpoint of the offering range indicate a discount of 31.6% on a price-to-book value basis and a discount of 35.2% on a price-to-tangible book value basis.
• The peer group includes: 1895 Bancorp of Wisconsin, Inc., Affinity Bancshares, Inc., Blue Foundry Bancorp, ESSA Bancorp, Inc., Finward Bancorp, Home Federal Bancorp, Inc. of Louisiana, IF Bancorp, Inc., Northeast Community Bancorp, Inc., Ponce Financial Group, Inc., Sterling Bancorp, Inc., and William Penn Bancorporation.

Stakeholder Impact

• Depositors will continue to have their accounts insured by the FDIC.
• Eligible depositors will have the opportunity to purchase shares in the stock offering.
• Employees will benefit from the establishment of stock-based benefit plans.
• The community may benefit from increased lending and investment activities.

Next Steps

• Obtain approval of the plan of conversion by a majority of votes eligible to be cast by members of Fidelity Bank.
• Sell at least 12,750,000 shares, which is the minimum of the offering range.
• Receive the approval required from the LOFI and non-objection of the FDIC to complete the conversion and stock offering and the approval required from the Federal Reserve Board with respect to FB Bancorps holding company application.

Key Dates

Keywords

stock offering, conversion, Fidelity Bank, FB Bancorp, Nasdaq, mutual to stock, capital raise, community bank, 401(k) plan, employee stock ownership plan